Wiggin and Dana Attorneys Help Draft New Legislation Geared Towards Startups
New Haven - Wiggin and Dana attorneys Frank Marco and Bill Kilgallen recently worked with U.S. Senator Chris Murphy (D-Conn.), who was joined by U.S. Senators John Thune (R-S.D.), Pat Toomey (R-Pa.) and Brian Schatz (D-Hawaii), as well as U.S. Congressmen Brad Schneider (D-Ill.), Steve Chabot (R-Ohio) and the Angel Capital Association, to draft proposed legislation that would clarify the ability of entrepreneurs to pitch their businesses at investor forums without running afoul of regulations that restrict general solicitation.
Introduced on June 19, 2014, the Helping Angels Lead Our Startups (HALOS) Act would require the SEC to remove the uncertainty created when it adopted rules pursuant to the Jumpstart Our Business Startups (JOBS) Act. These rules currently place companies and investors participating in investor forums such as "demo days" at risk of onerous requirements, including the need for investors to disclose personal financial details. This requirement can interfere with these events and deter investors from backing startups, which impacts their ability to grow their business. For more information about the HALOS Act, please see the advisory titled "HALOS Bill Seeks to Remove Uncertainty That May Burden Investor Forums and Similar Events."
Investor forums such as "demo days" are used by startup companies to pitch their businesses. "These events have become an increasingly important tool for capital formation over the years, particularly due to the expanding role of angel investors and the desire by trade associations, universities and others to help facilitate capital formation and economic development," comments Frank Marco, Chair of the firm's Emerging Companies and Private Equity Practice. "We are grateful for the opportunity to work with the Angel Capital Association and Senator Murphy's office on the drafting of this bill."
Attorneys in Wiggin and Dana's Emerging Companies and Private Equity Practice work with startup companies to ensure that they are structured appropriately and to assist them in removing obstacles to growth. The practice is committed to fostering a hub of talent, technology and innovation among the entrepreneurial community. Attorneys in this practice are leaders in many of the region's technology and venture capital trade organizations and frequently lecture on founding and financing emerging companies.